UAAS: A chronology of corruption

Ukraine’s most fertile lands have yielded lousy results

Ukrainian Academy of Agrarian Sciences President Yaroslav Gadzalo

What went wrong?

More than a quarter of a century has passed since Ukraine became independent, but its government remains the biggest land owner. Stewardship over huge tracts of Europe’s most arable farmland remains the the main task of UAAS, which was created in Soviet times to manage and allocate agricultural resources. It has failed. Miserably.

How much does “free land” cost to buy?

Source: Eurostat

UAAS productivity stinks

How much does “free land” cost to rent?

  1. Lack of competition: UAAS deals directly with enterprises which lease its lands. There are no open competitions for leasing land from the academy. Market mechanisms can’t offset the influence of artificially lowered rates. The stated rule of putting state-owned land tracts up for sale does is not followed.
  2. Lack of interest: There is no economic stimulus for UAAS managers to increase profits. It is a budget organization. It doesn’t matter whether a director of an academy institute rents 1,000 hectares of land for $28 per hectare or organizes a tender that fetches $100 per hectare. The director’s salary remains the same whatever the price is. Academy expenditures do not depend on academy profits. UAH received UAH 740 from the 2017 State Budget.

Untapped potential

It is difficult to estimate how much money Ukraine has lost because of UAAS. Average annual earnings per hectare among the top Ukrainian agroholdings is $424. The academy’s earnings in 2016 totaled UAH 346, $28 per hectare, or 15 times lower.

peter byrne is а рассеянный journalist who spends his free time collecting ideas, running and learning new technologies.